Democrats from the US House of Representatives are looking to introduce legislation that would require the country’s Health and Human Services Secretary to negotiate lower prices for the Medicare insurance programme with pharmaceutical companies.
HR 4, the ‘Medicare Prescription Drug Price Negotiation Act,’ states that “the secretary shall negotiate with pharmaceutical manufacturers the prices…that may be charged" to organisations offering coverage through Medicare, which deals with some 43 million elderly and disabled Americans. In the past, drugmakers declined to negotiate with the government, claiming that such price control measures would force them to cut spending on R&D for innovative drugs. Under the 2003 Medicare law, passed by a Republican Congress, insurers and their agents currently negotiate prices with drug manufacturers and the law prohibits the secretary from interfering in the matter.
It appears that this situation may now change. The Democratic Party gained control of the House after a huge victory at the polls in November and has traditionally been regarded as less than favourable to drugmakers than the Republican Party. However, the bill also states that private insurers would establish their own list of covered drugs and the secretary could not “establish or require a particular formulary,” which has led some analysts to dispute the effectiveness of the new plan.
The response from the country’s industry association has been guarded. The Pharmaceutical Research and Manufacturers of America’s senior vice president Ken Johnson said that “we've just received a copy of the legislation and we're trying to determine the practical implications of it.” He added that “while we are very supportive of the Medicare prescription drug benefit – and are committed to making a good programme even better – we remain strongly opposed to any price control schemes which would limit the choice of medicines available to seniors and disabled Americans."
Much more pleased with the proposed changes was William Novelli, chief executive of AARP, which represents 38 million elderly Americans, who said he backed “the common sense approach to give the HHS secretary the opportunity to develop a workable negotiation process for prescription drugs, consistent with the structure of the Medicare drug benefit, with the ultimate goal to lower drug costs.”
A vote by the full House is expected later this week and if the bill passes, it must go to the Senate, where Democrats hold a slim majority, before it goes to President Bush, who has the power to veto such a measure.